The Hindu Business Line : Coal India hikes prices by 10%

Improving efficiency
In an effort to improve the realisation as well as organisational efficiency, CIL may introduce more grades as per the heat value of coal of its produce beginning next fiscal.

Our Bureau

Kolkata, Dec. 14 After a gap of three-and-a-half years, Coal India Ltd revised coal prices by 10 per cent on Thursday.

The price increase is effected on all categories of coal produced by all the subsidiaries with the sole exception of North Eastern Coalfields (NEC). Coal produced by the Margherita based NEC will be costlier by 15 per cent. CIL had previously revised prices in June 2004.

According to the CIL Director (Marketing), Mr K. Ranganath, the price rise was long over due and might not be adequate to cover the inflationary impact on the overall input cost to the company during the last three years. “However, this would bring some relief to the cash-starved coal companies,” he said.

The price rise is expected to improve the CIL bottomline in excess of Rs 700 crore during the next quarter (January-March, 2008). The net profit for the entire year (2007-08) is expected to cross the Rs 7,000-crore mark if the production trend reaches the targeted levels.

The company registered 5.3 per cent drop in profit to Rs 8,212.69 crore during 2006-07.

According to Mr Ranganath, implementation of the last National Coal Wage Agreement was a major reason behind the increase in input costs to CIL.

Gradation of coal

In an effort to improve the realisation as well as organisational efficiency, CIL may introduce more grades as per the heat value of coal of its produce beginning next fiscal.

We are planning a revision of the gradation of coal in the future. While that would take time to introduce, we are now in the process of creating more sub-grades within the existing product range, Mr Ranganath said.

The existing product range of CIL offers huge variation in heat of approximately 900 kilo Calorie (K Cal) within a particular grade. The new system will narrow the gap to 200-250 K Cal, thereby ensuring better price for better products.